1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 5:

Transcript:1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 5::
1 PRINCIPLES OF SUSTAINABLE FINANCE Chapter 5: Strategy & intangibles Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 2 Part I: What is sustainability and why does it matter? Sustainability and the transition challenge Part II: Sustainability’s challenges to corporates Externalities - internalisation Governance and behaviour Coalitions for sustainable finance Strategy and intangibles – changing business models Integrated reporting - metrics and data Part III: Financing sustainability Investing for long-term value creation Equity – investing with an ownership stake Bonds – investing without voting power Banks – new forms of lending Insurance – managing long-term risk Part IV: Epilogue Transition management and integrated thinking Overview of the book Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 3 explain why and how companies should connect sustainability to their competitive position, business model, intangible assets and strategy; loosely connect corporate sustainability performance with corporate financial performance; identify the materiality of sustainability issues; explain how companies can prepare for the transition to a sustainable economy. Learning objectives – chapter 5 Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Why does sustainability matter to competitive positions, business models, intangibles and strategy? 4 Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 5 Linking sustainability and strategy Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 6 Competitive positions Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Sources of competitive advantage: 7 Competitive positions Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 8 Business models Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Three components of a business model (Johnson, 2008): 9 Business models Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Business model canvas (Osterwalder & Pigneur, 2010): 10 Intangibles Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Note: all measured as a percentage of the market value of S&P 500 companies Source: Ocean Tomo 11 Intangibles Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 12 Materiality Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press 13 Materiality mix Principles of Sustainable Finance © Schoenmaker and Schramade 2019 Oxford University Press Figure 5.6: Novozymes’ materiality matrix Sales Earnings Compliance Innovation Partnerships Climate change & energy Corporate governance & ethics